Let me describe the life of a contract trader in the cryptocurrency world:
But if you're in contracts, you basically sleep 2 hours a day, and the alarm goes off every 15 minutes.
Watching the K-line fluctuate, feeling anxious, watching the spikes, your heart racing. Afraid of being liquidated.
The deposit is only 3000 yuan, which is the last principal for delivering takeout by electric bike.
No girlfriend, no time to spend with family, no sex life, and not interested in anything else.
Maybe just smoking and eating betel nut, with bloodshot eyes.
One late night, I was liquidated, and the next day I put on a kangaroo outfit to deliver takeout.
But I’m so tired; I haven't eaten well for a long time and have become malnourished.
But in the cold wind and under the scorching sun, you can only endure.
You, with dark circles under your eyes, delivered the wrong takeout once and got a bad review from the customer.
You lost 50 yuan, and you need to deliver 10 more orders to earn it back.
You have no way out, but at this moment, the bull market in the cryptocurrency world has returned.
You no longer have the capital to enter the market, your credit card is overdue, and you haven't paid back your friend's money.
Your parents' money has been squandered by you, and you feel no warmth in this cold city.
People in the cryptocurrency world may increase their value by 50 to 100 times overnight, or they may instantly become worthless.
Playing contracts in the cryptocurrency world is like playing with your heartbeat, thrilling and more stimulating than riding a roller coaster.
Have you ever experienced consecutive losses and frequent liquidations?
Then you feel frustrated and regret your decision?
You are eager to recover your losses, but instead, you fall deeper?
You keep fantasizing about the scenes after success, but reality keeps slapping you in the face.
For beginners, avoiding contract trading and starting with spot trading is a more prudent choice, backed by multiple reasonable logics.
Contract trading hides multiple risks for beginners.
The high leverage characteristic of contract trading is a 'double-edged sword' that beginners find difficult to handle. Contract trading usually allows investors to use leverage, meaning that a small amount of principal can control a larger trading scale. For example, 10x leverage means that if the price fluctuates by 10%, the investor's principal could face the risk of complete loss. Beginners have a weak ability to endure market fluctuations and lack an intuitive understanding of leverage risks, making them susceptible to magnified losses due to short-term price fluctuations.
The forced liquidation mechanism combined with the 'spike' risk further exacerbates the dangers of contract trading. As mentioned earlier, 'spikes' can cause prices to fluctuate sharply in a short period, and in contract trading, such fluctuations can easily trigger forced liquidations. Beginners often underestimate sudden market situations and lack experience in dealing with 'spikes,' making it likely that they miss the opportunity to recover their losses after a rapid price correction due to being forcibly liquidated, resulting in irreversible losses.
In addition, the complexity of contract trading rules far exceeds beginners' understanding. Besides leverage and forced liquidation, it also involves margin calculations, expiration deliveries, perpetual contract fees, and other professional content. If beginners rush into the market without thoroughly understanding the rules, they may incur losses due to operational errors (such as insufficient margin or choosing the wrong delivery time), which is particularly regrettable for beginners.
Spot trading is an ideal choice for beginners.
The risk boundaries of spot trading are clear, making it more suitable for beginners to establish risk awareness. In spot trading, investors buy the cryptocurrency itself, and the maximum loss is the invested principal, with no risk of excessive losses or liquidation due to leverage. This characteristic of 'controllable losses' allows beginners to gradually accumulate experience in the market without constantly worrying about the extreme situation of 'liquidation overnight.'
Spot trading is simple to operate, making it easier for beginners to focus on learning market rules. The logic of spot trading is straightforward: buy low and sell high to earn the price difference, without needing to consider complex parameters like leverage ratios or margin maintenance. Beginners can concentrate on studying core content such as market supply and demand, news impacts, and technical indicators, gradually understanding the underlying logic of price fluctuations and laying a foundation for more complex trading in the future.
From the perspective of cultivating a trading mindset, spot trading better helps beginners establish rational habits. The high volatility of contracts can easily lead to emotional trading, and beginners often increase their positions impulsively due to short-term profits or panic sell due to losses. In contrast, spot trading has a relatively steady rhythm, with smaller psychological impacts from price fluctuations, making it easier for beginners to cultivate a 'long-termism' mindset and avoid falling into the vicious cycle of chasing highs and cutting losses.
For beginners in the cryptocurrency world, the core of investment is to accumulate experience and build understanding. Spot trading provides a low-risk practice arena, allowing beginners to learn the rules and refine their mindset in a real market; while the high complexity and high risks of contract trading are more likely to lead to significant losses for beginners at the entry stage, causing them to lose confidence in the market. Therefore, starting with spot trading is a more robust and sustainable choice.
If you currently feel helpless and confused about trading, you want to better understand the market trends to have confidence in your operations. Steady gains are far more practical than fantasizing about getting rich.
